On February 9, ridesharing company Taxify started allowing riders in Kampala book boda-bodas. This placed it in direct competition with SafeBoda. Uganda’s pioneer boda-boda ridesharing company. It is also rumoured that Uber will launch UberBoda. Though, Taxify became the first car-ridesharing company in Uganda to allow booking Boda-bodas.
But, the question is, “who’ll come out on top?” To arrive at a concrete answer, I will have to take you through assumptions. Otherwise, things in the ride-hailing market change very fast.
For your understanding, I will approach this from bottom-down. Statista, an online statistics portal, estimates that “by 2020, global revenue of the ridesharing industry will be approximately USD 61.4 billion.” They also add that there’ll be a jump in riders from 338 Million in 2018 to 500 Million in 2020. That’s how big the market is.
According to CrunchBase, companies in the ridesharing space took more than 10 percent of all unicorn investments last year. An amount in Billions of dollars. This signifies the importance of ridesharing to our future.
Since last year, all the big players in the space – Lyft, Grab, Ola, Didi Chuxing and Uber – have raised funding. Masayoshi Son’s SoftBank participated in all, except the U.S focused Lyft.
Currently, Uber and Taxify are leading the ridesharing market on the African continent. With Uber having a presence in 16 African cities and 8 countries. While Taxify having a presence in 8 African cities and 5 countries. Yet SoftBank has a hand in both Uber and Taxify.
For Uber, SoftBank is currently the majority shareholder at 15%. After it’s more than USD 7 Billion investment late last year. For Taxify, Didi Chuxing owns a stake after an undisclosed investment last year. Didi also made a USD 1 Billion investment in Uber as part of the deal for Uber to exit the Chinese market. To wrap up the web of entanglement, Softbank made an investment of over USD 5 Billion in Didi last year.
From the above, it is safe to conclude that SoftBank controls the ridesharing market. Through Uber and Didi.
The developing markets weren’t as lucrative for the leaders Uber and Didi. That’s why they hadn’t developed solutions to suit such markets. This gave rise to players like SafeBoda in Uganda, SafeMotos in Rwanda and Go-Jek in Indonesia.
But, starting with Uber, the bigger players realized that some solutions that have scaled in the more organized and less trafficked cities may not work. That’s what drove Uber to launch UberMotors in Indonesia, Didi to go on an acquisition and investment spree, and Taxify to diverse and include Boda-bodas (Motorcycles) in Uganda on its platform.
This diversification tells the need for these companies to offer an end-to-end service. Uber or any other player in the market wants to be your logistics, riding, banking, payments and everything partner. Achieving this takes huge sums of money. Hence the crazy rounds.
No doubt SoftBank won the world’s ridesharing market. But, which brand under their control will thrive?
It is likely to be the one that will adapt to a given market. So, it shouldn’t surprise you to see SoftBank killing some brands. Especially in markets where they are number two or not scaling as fast as expected. An example is a hint on the company to pull out of Africa.
Taxify has also “branded” itself as the king of the emerging markets. And, should Uber pull out, I put my two cents on Taxify to take over the ridesharing market on the continent. Boda-bodas included.
Though not known for lavish spending, I doubt SafeBoda or SafeMotos can match them. None of the two has the financial muscle to offer an end-to-end service as compared to Taxify, at least.